ACC 561 Week 4 Assignment Duggan Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $288,190 for the year, and machine usage is estimated at 125,300 hours. For the year, $308,895 of overhead costs are incurred and 132,100 hours are used. The ledger of Custer Company has the following work in process account. Work in Processâ€”Painting 5/1 Balance 3,990 5/31 Transferred out ? 5/31 Materials 7,170 5/31 Labor 3,230 5/31 Overhead 1,370 5/31 Balance ? Production records show that there were 500 units in the beginning inventory, 30% complete, 1,520 units started, and 1,420 units transferred out. The beginning work in process had materials cost of $2,270 and conversion costs of $1,720. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process Wilkins Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the companyâ€™s operations. Standard Custom Direct labor costs $44,700 $102,000 Machine hours 1,140 1,120 Setup hours 96 400 Total estimated overhead costs are $305,700. Overhead cost allocated to the machining activity cost pool is $196,700, and $109,000 is allocated to the machine setup activity cost pool.